Data provided by Companies House shows that the number of private and public limited companies receiving penalties for late filing has increased significantly in four years.
In 2014/15, the number of penalties issued in England and Wales stood at 165,000 with a total value of around £78m. However, in 2017/18 the number had reached 204,000 with a cost to businesses of around £87m.
Companies are required to report their annual accounts to Companies House as well as HMRC. A late filing penalty (LFP) can be imposed by Companies House under s453 of the Companies Act 2006 (CA 2006). Private Limited Companies can be fined £150, for up to one month after the deadline, to £1,500 for filings six months late. Public Limited Companies can be fined between £750 and £7,500. If a company files late for two consecutive years the penalty amount is doubled.
Companies can appeal against late filing penalties if they can prove that the circumstances were beyond the control of the director, such as in the case of company records destroyed by fire, but appeals claiming that a company was dormant or unable to pay, among other conditions, will be disregarded.
In addition to these sanctions, directors can be fined up to £5,000 for failing to file company accounts and confirmation statements on time and a further charge of £500 a day for additional compliance delays.
Failure to file a set of accounts or confirmation statement at Companies House can also result in a company being struck off. This process is now instigated by Companies House within two months of the original deadline.